Making Tax Digital for landlords: what changes from April 2026?

Making Tax Digital for Income Tax (MTD) might have felt a bit distant over the past few months. That changes now.

On 6th April 2026, MTD for Income (MTD for IT) becomes mandatory for a large number of UK landlords.

If you currently complete a Self Assessment tax return for rental income, this represents one of the biggest changes to the way tax works in decades. It affects:

How you keep records
How often you report information to HMRC
What replaces the annual Self Assessment tax return

This guide explains, in plain English:

What Making Tax Digital means for landlords
Who must comply from April 2026, and who doesn’t
What has replaced the Self Assessment annual return
What landlords should be doing now to prepare

Whether you own a single buy-to-let or a larger portfolio, understanding these changes early will make compliance far easier — and help you avoid unnecessary stress or penalties later.

What is Making Tax Digital for landlords?

Making Tax Digital is HMRC’s programme to modernise the UK tax system. This is how the principle behind can be summarised:

Tax reporting should be digital, up to date, and submitted using compatible software — not paper records or once-a-year forms.

For landlords, this takes the form of MTD for Income Tax (MTD for IT).

Under MTD for IT, landlords must:

Keep digital records of rental income and expenses
Use MTD-compatible software
Submit quarterly updates to HMRC
Submit an annual Final Declaration to confirm their tax position

This replaces the traditional approach of gathering everything at the end of the year and filing a single Self Assessment return.

When does MTD for landlords start?

MTD for IT is being introduced in stages, based on landlords’s qualifying income.

MTD start dates for landlords

From 6 April 2026
Mandatory if qualifying income is over £50,000
From 6 April 2027
Mandatory if qualifying income is over £30,000
From 6 April 2028
Mandatory if qualifying income is over £20,000

This means most landlords who currently file Self Assessment will be brought into MTD by April 2028.

Who is affected by MTD for IT from April 2026?

You will need to comply with MTD for IT from April 2026 if all of the following apply:

You are a UK landlord
You are an individual (not a limited company)
Your qualifying income exceeds £50,000
You currently file a Self Assessment tax return

What counts as “qualifying income”?

This is one of the most misunderstood parts of MTD.

Qualifying income is based on gross income, not profit.

For landlords, this includes:

Total rental income before expenses
Plus any self-employed income (if applicable)

Example:

Rental income: £38,000
Self-employed income: £15,000
Total qualifying income: £53,000

Even if your actual taxable profit is much lower, you would still fall into MTD from April 2026.

Who is not affected (yet)?

Not every landlord will be required to join MTD in April 2026.

You are not required to comply from April 2026 if:

Your qualifying income is £50,000 or less
All rental property is held inside a limited company
You fall under a recognised exemption

However, many landlords below the £50,000 threshold will still be brought into MTD in 2027 or 2028, so ignoring MTD entirely is unlikely to be a long-term option.

What about landlords with property in a limited company?

MTD for IT does not apply to limited companies.

If your rental properties are owned through a company, you remain subject to:

Corporation Tax
Existing corporation tax filing rules

If you own property both personally and through a company, only your personally held rental income is relevant for MTD for IT.

Are there exemptions from MTD for landlords?

Yes, but exemptions are expected to apply in limited circumstances.

You may qualify for an exemption if:

You are digitally excluded due to age, disability, or lack of internet access
You have a religious objection to using digital systems
It is not reasonably practicable for you to comply, and HMRC agrees

Exemptions need to be claimed and approved by HMRC. They are not automatic. We recommend seeking guidance from your accountant if you are planning to apply for an exemption.

What replaces the Self Assessment annual tax return?

One of the biggest changes under MTD for landlords is that the traditional Self Assessment tax return is being replaced.

What landlords submit under MTD for IT

1. Quarterly updates (four per year)

Landlords must submit quarterly summaries of income and expenses using MTD-compatible software.

Key points:

These are updates, not tax returns
No tax is calculated or paid at this stage
Figures can be estimates
Corrections can be made later

The aim is to give HMRC a clearer, more up-to-date picture of income throughout the year — not to lock landlords into final numbers every quarter.

2. Final Declaration (once per year)

At the end of the tax year, landlords submit a Final Declaration.

This replaces the annual Self Assessment submission.

The Final Declaration confirms:

Total income from all sources
Allowances and reliefs
Adjustments and claims
The final tax position for the year

Only once the Final Declaration is submitted is the tax liability finalised.

How often will landlords need to report?

Under MTD for IT, landlords will typically submit:

4 quarterly updates
1 Final Declaration per tax year

That’s five submissions per year, instead of one.

This is why the choice of the right software will make the transition to this new system much smoother — manual record-keeping simply isn’t designed for this level of ongoing reporting.

What does “digital record-keeping” actually mean?

Digital record-keeping means more than typing totals into a spreadsheet once a year.

Under MTD rules, landlords must:

Record income and expenses digitally
Store those records in compatible software
Maintain a digital link between records and submissions

What records must be kept digitally?

For rental property, this includes:

Date of income or expense
Amount
Category (rent, repairs, insurance, etc.)
Property information where relevant

You can still keep paper receipts, but the primary records must be digital.

Can landlords still use spreadsheets?

Spreadsheets are not banned, but they are restricted.

For many landlords, spreadsheets alone will not be sufficient, particularly as MTD reporting becomes more frequent.

What are the penalties for not complying?

MTD for IT introduces a points-based penalty system.

You can receive penalty points for:

Missing quarterly updates
Submitting late Final Declarations
Failing to keep digital records

Points accumulate over time and can lead to financial penalties if thresholds are reached, making ongoing compliance important.

Late submissions penalties have been waived for the first year, until April 2027.

Why HMRC is introducing MTD for landlords

HMRC’s stated aims include:

Reducing errors caused by manual record-keeping
Improving accuracy and timeliness of tax data
Closing the tax gap
Encouraging better financial awareness

Whether landlords see benefits depends largely on how prepared they are and how effectively they adopt digital systems.

What should landlords be doing now?

Early preparation makes a significant difference.

Practical steps to take now

Check your qualifying income
This determines when MTD applies to you.
Review your current record-keeping
Paper-based systems will not be compliant.
Talk to your accountant early
MTD changes workflows for agents as well as landlords.
Start keeping records digitally
Building the habit early reduces disruption later.

How digital record-keeping works in practice

In practice, MTD-compliant record-keeping means:

Rental income recorded as it’s received
Expenses categorised correctly throughout the year
Data flowing digitally into quarterly updates
Fewer year-end surprises
Better visibility over tax liabilities

For many landlords, this is a shift away from reactive, once-a-year accounting towards ongoing financial clarity.

Final thoughts: MTD is no longer optional for most landlords

Making Tax Digital for landlords is not a minor administrative tweak. It is a fundamental change to how tax reporting works.

Landlords who leave preparation too late risk unnecessary stress and much higher compliance cost down the road.

Those who prepare early can approach MTD with confidence — and potentially gain better control over their property finances in the process.

Landlord MTD